Gregoire dismisses budget ideas in governor’s race

OLYMPIA — Washington Gov. Chris Gregoire shot down the budget-balancing ideas of her potential successors Thursday, saying revenue must be considered in order to fully fund education.

Democrat Jay Inslee and Republican Rob McKenna both have said they believe state spending can be stabilized without any new taxes. But the state needs to find $1 billion in savings or cuts to properly balance the budget in the next biennium, along with another $1 billion to adequately fund education in response to a state Supreme Court ruling.

Gregoire said state government already has gone through plenty of cuts, noting staffing reductions in particular. She hasn’t proposed any specific taxes but expects to include revenue options in a forthcoming budget proposal — a budget that ultimately will be finalized by the next governor and Legislature.

“We just have to be honest with the public,” Gregoire said.

McKenna and Inslee have proposed various ideas, including dependency on revenues that come with a growing economy. Here’s a rundown of the specific budget-balancing proposals that Gregoire addressed in a meeting with reporters:

LEAN management: Both candidates have mentioned LEAN management as a way to improve government efficiency, with Inslee repeatedly focusing on it as an opportunity. Gregoire noted she also has been working on LEAN and recently held a conference on the government transformation effort. But Gregoire said LEAN is mostly useful right now to help a depleted state workforce do the work with fewer resources, and she said there is little money to be saved by doing more of that efficiency work in the near-term.

“Right now, it’s coping with the dramatic cuts,” Gregoire said.

Health care costs: Both McKenna and Inslee have talked about restraining health care costs as a way to free up extra money. Gregoire agreed it’s important work to do for the long-term, but she noted the challenges of changing the system are daunting, especially since it often requires coordination with the federal government.

For example, Gregoire has worked for two terms on the issue of limiting the bureaucracy for people who are eligible for both Medicaid and Medicare because the lack of coordination between the programs can lead to unnecessary hospital visits and other expenses. After working on the issue for years, Gregoire just earned a waiver from the federal government — one of only two states to get it — to work on an improved system in hopes of saving a mere $14 million over five years.

Tax breaks: Both candidates have talked about reassessing tax breaks for various industries. But Gregoire said she’s been there, done that. She noted that efforts to end minor boards and commissions can be a challenge in the Legislature because there always are people who fight to save them, and that is only magnified when money is involved.

Repealing tax exemptions usually doesn’t provide much extra cash, either.

Budget limits: McKenna has said he would like to cap non-education spending growth at 6 percent a year. Gregoire said that’s not really realistic, because it might mean drastic measures like more prisoner releases or a decision by social services officials to stop accepting child abuse complaints.

“You need to understand as governor that you don’t have that much discretion over your budget,” Gregoire said.

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